Faced with headquarters' desire to add a new product line, Stefan Grenier, manager of Bilti Products' East Division, felt that he had to see the numbers before he made a move. His division's ROI has led the company for three years, and he doesn't want any letdown. Bilti Products is a decentralized wholesaler with four autonomous divisions. The divisions are evaluated on the basis of ROI, with year- end bonuses given to divisional managers who have the highest ROI. Operating results for the company's East Division for last year are given below: Sales Variable expenses Contribution margin: Fixed expenses Operating income Divisional operating assets: $21,000,000 13,400,000 7,600,000 5,920,000 $ 1,680,000 $5,250,000 The company had an overall ROI of 18% last year (considering all divisions). The new product line that headquarters wants Grenier's East Division to add would require an investment of $3,000,000. The cost and revenue characteristics of the new product line per year would be as follows: Sales $ 9,000,000 Variable expenses Fixed expenses 65% of sales $ 2,520,000